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Life Insurance Corporation of India v. Asha Goel (2001) 2 SCC 160

Life Insurance Corporation of India v. Asha Goel (2001) 2 SCC 160: AIR 2001 SC 549

FACTS-

  • Late Naval Kishore Goel, husband of Smt. Asha Goel, applied for a life insurance policy with the Life Insurance Corporation of India (appellant) in 1979. The policy was issued for Rs. 1,00,000.
  • Naval Kishore Goel passed away in 1980 due to acute myocardial infarction and cardiac arrest.
  • Asha Goel (respondent no.1), as the nominee, informed the Divisional Manager about her husband's death and submitted a claim.
  • The Corporation refused to pay the claim, alleging that Naval Kishore Goel had provided false information regarding his health at the time of applying for the insurance.
  • The Corporation informed the claimant that when the deceased applied for insurance on 29-5-1979, he stated he was in good health, hadn't seen a doctor for any serious illness in the past five years, and had not taken any extended sick leave from work during that time.
  • A writ petition is filed by the Asha Goel (respondent no.1) under art. 226, Single judge bench decides the matter in favour of Asha Goel (respondent no.1).
  • The division bench of HC, rejected the contention that the writ petition should be dismissed as not maintainable leaving it to the writ petitioner, Respondent 1 herein, to file a civil suit for enforcement of her claim.
  • Now, present appeal against the maintainability of the writ petition and claim of insurance policy before SC.

ISSUE-

  • Whether writ petition is maintainable in cases which involve insurance claim out of contractual obligation.
  • Whether the insurance policy obtained by Naval Kishore Goel was voidable due to misrepresentation.

RULE-

  • A writ is not a proper remedy against the repudiation of an insurance claim.
  • Mere inaccuracy or falsity in respect of some recitals or items in the proposal is not sufficient to avoid the claim under sec 45 of Insurance Act.

HELD-

  • The court considered the jurisdiction of the High Court under Article 226 of the Constitution regarding the enforcement of contractual rights.
  • It emphasized that while Article 226 is expansive, the High Court should not entertain writ petitions for mere enforcement of contractual claims, especially if disputes involve contested facts requiring inquiry.
  • Mere inaccuracy or falsity in respect of some recitals or items in the proposal is not sufficient. The burden of proof is on the insurer to establish these circumstances and unless the insurer is able to do so there is no question of the policy being avoided on grounds of misstatement of facts.
  • For determination of the question whether there has been suppression of any material facts it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person.
  • The court highlighted the duty of the Corporation to exercise extreme care and caution in repudiating policies and to avoid a mechanical approach.
  • The court directed the Corporation to pay the claim amount as directed by the Single Judge, emphasizing the importance of prompt and efficient service.
  • The pending case before the High Court was disposed of accordingly.